Energy Tower reps a no-show at council meeting

By Joseph Basco | jbasco@mrt.com

Published 5:30 pm, Tuesday, September 9, 2014

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What was originally touted as a multi-million dollar high-rise project to revitalize the downtown core might have been demolished Tuesday, as developers for Energy Towers at City Center failed to present before City Council for a second consecutive time.

Project co-developer Energy Related Properties was not present at Tuesday’s council meeting for unknown reasons. When ERP declined to attend the Aug. 26 meeting, developers sent a letter offering an explanation for not showing and asking to present at the Sept. 9 meeting.

On Tuesday, the council unanimously voted to defer ERP’s presentation to a future council meeting. But this time, members didn’t offer any information on why the developers didn’t appear. Mayor Jerry Morales said he wants ERP to explain to the media why they did not appear, rather than have council do the explaining.

ERP has twice delayed a presentation to council within weeks of Sept. 30 -- the deadline set for a finalized developer’s agreement between the city of Midland and ERP.

After Tuesday’s meeting, Morales speculated that ERP may be backing out of the project.

“So there’s a feeling that maybe things aren’t coming to fruition, maybe the project cost more than they anticipated, and maybe they needed more space,” Morales said. “And then there’s parking, because it was the top of every discussion. Maybe ERP figured they could not get the parking they need without more incentives from this city. And I think we heard from this council that they don’t want to put up anymore incentives.”

Morales said that it’s hard to answer the question about ERP’s commitment to the project because the council did not receive anything from ERP before Tuesday’s meeting.

The dissonance between ERP and the city amplified after council members expressed frustration with the unveiling of the project’s two-tower redesign in April. Council members were not disappointed with the design itself, but rather that the design was not disclosed to the council first.

In late June, the city and ERP began renegotiating an incentive agreement, as council members thought the $50 million tax reimbursement deal applied to the one-tower design, not the two-tower concept. At the June 24 council meeting, Austin-based real estate firm World Class Capital Group announced it had joined the project team, detailed the two-tower design, and apologized to the council for the lack of communication between the parties.

In August, the city set a one-year sunset for the Downtown Midland Tax Increment Reinvestment Zone, one of several funding methods for the original tax reimbursement agreement. The TIRZ has $4.6 million left to use before its Sept. 1, 2015 expiration, a small fraction of the incentive funds ERP is seeking for the project.

Since then, a final incentive deal has not materialized.

The city and ERP have been negotiating since March 18, 2013.

The contentious tone between the city council and ERP is a stark contrast to the first year or so of the project’s public existence. Back then, the council was cheering the project as a downtown revitalization boon and was mostly supportive of incentivizing the project.

It is unknown what new project details developers were going to present, but Morales previously said representatives from Omni Hotels & Resorts were originally going to appear at the Aug. 26 meeting. Hotel space is one of the touted multi-use spaces of the project; the others are office space, convention space, retail space and park space.

The Energy Towers project is designed to take up the entire Wall Street block from North Colorado Street to North Main Street, one of the most, if not the most, prominent downtown properties. The city-owned former Midland County Courthouse, Centennial Plaza and Midland Center currently sit on the block.